Monthly : November, 2012

With a surging middle class population, soaring foreign direct investment and a booming stock market, there is good reason why India features so prominently in the global growth plans of so many Fortune 500 corporations. But for companies attracted by India’s 9.3 percent GDP growth economy in 2010, the ground reality is much different.

Innovations are driving growth in India. But should you launch a new brand, or extend an existing one? If you want to increase your chances of success five-fold, then “stretching” your brand is the way to go. Here’s why: brand extensions not only leverage the equity of the parent brand, but they also lead to faster adoption and deliver higher marketing efficiency.

As India’s economy continues to grow, shopping habits are evolving in kind, particularly among Low-Income Value Explorers (LIVE), a group once referred to as the “deprived” class. The LIVE demographic is mobilizing to become First-Time Modern Trade Shoppers (FTMTS). By 2015, Nielsen estimates that these two segments alone will drive an additional $3B USD of Fast-Moving Consumer Goods (FMCG) sales in India.

Common media practices in India emphasize reaching adults, focus heavily on urban consumers, and dedicate more media support to the core brand than to extensions by a ratio of 7:3 in the first year. Additionally, advertising formats of 30 seconds or longer are the prescribed majority among the 70 percent of commercials that do not communicate a new message. Nielsen research reveals a better, more effective way forward.